FTSE 100 cautious ahead of referendum but housebuilders gain ground

Discussion in 'Market News' started by Lily, Jun 22, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Chemicals group Elementis drops sharply after profit warning

    Leading shares are edging lower as uncertainty grows as the day of the UK’s vote on Europe approaches.

    With polls continuing to suggest a lead, albeit narrow, for remaining in the EU, housebuilders are gaining ground again. The sector is expected to suffer in the case of Brexit, so a vote to remain should benefit them. Taylor Wimpey is up 2.6p at 188.2p while Persimmon has put on 28p to £20.74.

    A very muted opening on the FTSE today as investors seem to be waiting for the EU referendum.

    The recent poll-inspired surge looks like it has run its course and trading is going pretty sideways for now.

    Elementis’ first half pre-close update highlights further pressures within Chromium export markets. The relative strength of the US dollar has created a challenging competitive environment in Eastern Europe in particular and, as a result, Chromium sales and margins outside of North America are expected to be materially lower than the previous year.

    Despite good progress in Specialties and a steady performance from Chromium in North America, earnings per share for the year as a whole will fall below previous expectations. We reduce our pretax profit and earnings per share forecasts by 12% in all three forecast years, assuming no recovery in Chromium over the period. One strong positive in the announcement is confirmation that the net cash position at the end of the year is still expected to be ahead of the prior year (implying no change to dividend per share forecasts), which should provide support, given the implied 5% yield.

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